Employer obligations under the new “Families First Coronavirus Response Act”

Excerpted from a Lexology blog by Cohen & Gresser LLP

The Families First Coronavirus Response Act (the “Act”) was signed into law on March 18, 2020. The Act provides paid sick and protected job leave for employees who are unable to work because they, or their family members, are impacted by COVID-19. The Act is applicable to employers with fewer than 500 employees. It provides tax credits to employers who are required to provide these enhanced benefits to employees affected by COVID-19. Covered employers should be prepared to implement this relief act’s requirements in short order. The Act will take effect on April 2, 2020.

Set out below is a summary of the key provisions of the Act.

Expansion of the Family and Medical Leave Act (“FMLA”)
The Act temporarily expands the FMLA (effective through the end of 2020) to allow eligible employees to take protected job leave if the employee is unable to work (in person or remotely) due to (i) a need to care for their minor child, (ii) the closure of the child’s elementary or secondary school or place of care, or (iii) the unavailability of a child care provider, all as a result of COVID-19. Eligible employees are those who have been with the employer for at least 30 days.

The first 10 days of leave may be unpaid. Employees can elect to substitute paid leave (accrued vacation, personal and/or medical sick leave) for the unpaid portion. After the first 10 days, the employer is required to pay employees an amount that is no less than two-thirds of an employee’s regular rate of pay for any subsequent absences related to COVID-19. Paid leave is capped at $200 per day and $10,000 per employee in the aggregate. Small businesses with fewer than 50 employees may be exempt from the Act’s paid leave requirements if compliance would jeopardize its business.

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